What Exactly is Next-Day Shipping?
One of the key considerations in e-commerce is delivery times. These days, customers demand quick shipping, for which retailers need to balance the courier services with prices. A great number of customers prioritize delivery speed. They may cancel an order if they find slow shipping speeds. Next-day shipping is a great solution to eliminate this issue.
Essentially, next-day shipping is a fast package delivery service through which your order gets delivered within 24 hours. It is a demanding solution in the e-commerce industry because customers expect the shortest possible delivery time at an affordable rate.
In other words, next-day shipping makes sure senders should ensure quick delivery to customers, unlike the one standard shipping service. For those businesses selling online, a next-day shipping option is vital to encourage customers to purchase. If they don’t support this option, other sellers who deliver faster will attract customers.
In APAC countries, e-commerce giants like Ninjavan, XDE, DHL, J&T, LBC, Lalamove, etc., are renowned for offering next-day shipping. These leading e-commerce firms have compelled other retailers to compete. So, many other e-commerce service providers also try to provide fast delivery at a low cost.
How Does Next-Day Shipping Work?
Next-day shipping works the same as a standard courier service. When the order is booked, the sender can either deliver the items to a local drop-off location or collect them from a stated address. After the courier retrieves the items, customers will get the order delivered within 24 hours. Packages categorized for next-day shipping are arranged and separated from the standard delivery packages to speed up their delivery.
Are Next-Day Delivery and Next-Day Shipping the Same?
Yes, next-day delivery and next-day shipping are the same. The service is alternatively known as a 24-hour delivery. These terms imply goods delivery the day after the courier has collected them. Generally, next-day shipping has a lower cut-off time compared to same-day delivery. Moreover, next-day shipping offers great flexibility because it allows couriers to be more accurate while delivering the goods to the customers.
How Much Does Next-Day Shipping Cost?
After understanding what next-day shipping means, you may want to know how much next-day shipping is. Its cost is not fixed because it depends on factors like package weight and dimensions, delivery time, shipping distance, and more. The cost also depends on whether it’s domestic or international shipping.
If an e-commerce service provider has just one distribution center, the average transportation cost for an item through next-day shipping is approx $27. On the other hand, for an e-commerce service provider with ten distribution centers, the average transportation cost for an item through next-day shipping is significantly reduced; it might be approx $10.
The e-commerce giants like Ninjavan, XDE, DHL, J&T, LBC, Lalamove, etc., offer next-day shipping at an affordable price. The reason is they have ample distribution centers in key locations.
Things to Consider with Next-Day Shipping
Taking into account the following factors might streamline the next-day shipping.
i. The cost to retailers
Many offline and online retailers now provide a next-day shipping option at an additional cost. This additional cost can be up to four times the total cost of standard shipping. But the high shipping costs may deter those customers who don’t wish to pay extra for quick shipping.
To compete with the shipping speeds of e-commerce giants, many smaller retailers rely on next-day air shipping. Consequently, this results in higher shipping costs. Therefore, most retailers find next-day shipping an expensive proposal.
ii. Warehouse location
The warehouses’ location influences your potential to provide next-day shipping to customers. To offer next-day shipping, you must arrange to strategically locate warehouses via a partnership with different warehouse providers in the major locations. It ensures a reduction in delivery expenses and delivery time.
Many online retailers can fulfill the customers’ demand for fast delivery at an affordable cost. They accomplish this by incorporating their fulfillment networks with trustworthy 3PL fulfillment companies. This concept is gradually getting normalized in e-commerce retail.
Lalamove understands the significance of warehouse location in determining next-day shipping. Therefore, it owns a vast warehouse network across the globe. Strategically locating warehouses allows leading e-commerce giants like Lalamove to obtain great shipping rates with key carriers. Also, it allows them to ship numerous orders quickly.
A shipping service provider with only one distribution center has to ship orders over 5 to 6 shipping zones. This creates shipping delays and eats away the retailers’ profit margin owing to expensive shipping rates. However, few shipping service providers can pay for the lease obligations and expenses associated with operating distribution centers in various locations.
iii. Environmental concerns
For customer retention, many merchants are adopting next-day shipping solutions. However, adopting this solution gives rise to environmental concerns. The carbon emissions can be significantly reduced when groceries are combined and delivered to customers rather than customers going to each grocery store. When items need to be delivered instantly, it becomes challenging to consolidate and deliver them together. Ultimately, this reduces the environmental benefits of consolidated shipments.
Next-day shipping drops only limited packages at each destination. It results in more trucks carrying limited items. So, it increases greenhouse gas emissions. Adopting the next-day shipping solution is better for certain situations.
Is Next-Day Shipping Right for Your Business?
The fast and affordable shipping services from e-commerce giants like Ninjavan, XDE, DHL, J&T, LBC, Lalamove, etc., have increased customer expectations. It makes it easier for smaller e-commerce companies to compete with the companies that offer next-day shipping.
Next-day shipping is right for your business if your business prioritizes customer retention, higher sales, and customer satisfaction. Though it’s not inexpensive to provide this service, it may prove to be a valuable long-term strategy.
Next-day dispatch helps businesses in the following ways:
- Creates opportunities for higher sales, more leads, and greater consumer loyalty,
- Offers a quick delivery strategy,
- Saves money and time,
- Builds trust and helps businesses become competitive.
Benefits of Next Day Shipping
The benefits have been discussed below to justify the worth of next-day shipping.
- Living up to customer expectations
Most couriers provide next-day shipping service to provide customers with decent value for money. They also provide it to fulfill the customers’ demand to receive their orders efficiently and quickly. Shipping the orders within 24 hours builds the company’s reliability and reputation in the market.
The quick delivery solution implies that your orders will be dispatched and delivered without delay. Consequently, customers need not wait for urgent orders like clothes, daily necessities, etc.
- Improving conversion rates and lowering cart abandonment
The next-day shipping effectively increases conversions and outclasses your competitors. If an e-commerce company can continue providing this service for several months or years, it encourages customers to shop more. This leads to a higher conversion rate and, ultimately, more sales. Providing incentives for next-day shipping encourages additional or expensive purchases, which add value to the total expenditure.
If the estimated shipping time is more, customers may likely move on to other e-commerce companies. So, providing next-day shipping lowers cart abandonment.
- Attracting window shoppers and reduced pre-delivery cancellations
The next-day shipping attracts people to window shopping. This is because they are ensured with quick delivery, so they simply need to browse through different products and services. A range of products or services may entice people to buy any of them while browsing. So, this shipping solution indirectly leads to higher sales.
One of the key reasons why customers cancel their orders before delivery is the delivery speed. Choosing next-day shipping guarantees faster delivery and thus reduces the odds of pre-delivery cancellations.
- Customer Loyalty and Repeat Business
Next-day shipping offers a loyal customer base because it offers affordable prices and quick delivery. Customers who had experiences with other businesses that offer slower delivery will value the next-day shipping solution. Two factors determining customer loyalty and repeat sales are fast delivery and reasonable price. The next-day shipping fulfills both these criteria and therefore helps e-commerce businesses to build trust among customers. Once this trust is built and customer satisfaction is guaranteed, it will likely attract more customers and thus lead to repeat business.
Offering next-day shipping may negatively influence profitability at first. However, it will gradually lead to an increased customer base who would like to buy more in the future. Hence, these solutions help build lasting customer relationships and boost business profits.